Ex employer took the taxes from my checks but never reported my wages

Question

my ex employer of 5 years took the tax money from every pay check starting in 2018 - 2023. This year when filing my taxes there are issues my ex boss has never reported my wages. So having my new company look at my past w2s they see not only did he take the taxes he was over taking money the whole time. I had an extra $20 a pay taken out to go towards taxes so I would never owe. getting paid 2x a month that total is around $4,800 the tax he was over taking on was the pa unemployment tax should have been around 30 to 40 dollars a year nope he helped himself to about $1,100.00 or more a year. I had 5 years of Social Security missing I have gotten 4 years back so far, I filed my taxes March of 2024 expecting a refund but here we are January 2025 getting ready to file another year and still do not have 2024 refund. Sorry this is so long but there is just so much to all this going on. So now my questions how long can the IRS hold this refund up knowing this is nothing I did wrong but all on ex employer and is there anyway to get the money he over took from paychecks and I believe this is a criminal situation am I correct and what can be done? Thank you for any information I can get! This is all happening in Pennsylvania.

Answer 1

For your specific situation I suggest engaging a EA, CPA, or a tax attorney to work with the IRS on resolving your case.

Some generic information:

Withholdings are not the actual tax. What's withheld from your paycheck for income tax is not the actual tax, and the calculation may not take into account your income outside your salary, or your potential deductions/exemptions/credits. You reconcile the withholding with your actual tax liability on your tax return (see form 1040 lines 16-24, 25-33, and 34-38).

So if your employer over-withheld taxes for you, you should in fact get a refund from the IRS.

Employer not reporting is not your problem. Whether the employer reported/paid to the IRS what they've withheld from you or not has no bearing on your tax return or refund. The only reason this may now be held up is because the IRS has to confirm that the withholdings did in fact happen. A professional may help here with the convincing. You can also reach out to the IRS Taxpayer Advocate Service.

Misreporting/Misappropriation of withholdings is in fact a crime. But that's between the US government and your employer, you're not a part of it (unless you're a willing participant in an illegal scheme). The IRS has a page with information on employment taxes, their reporting, and remittance. The IRS Publication 15 (Circular E) lists some of the penalties for violations. These are very severe. Once the IRS is convinced that you're in fact telling the truth - they will go after that employer.